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WASHINGTON: Finance Minister Ishaq Dar said on Sunday that 10 months were long enough for the government to stage a political comeback.
“We had to choose between saving our politics or saving the state. And we chose to save the state,” Minister Dar said at a news conference at the Pakistan embassy. “We knew it will have consequences, but we opted for the state.”
The finance minister was in Washington to attend the annual meetings of the World Bank Group and almost all his meetings focused on the economy and the impact of the recent floods on the people and the infrastructure.
But several initial questions at the conference focused on the result of Sunday’s elections that gave an unprecedented victory to PTI. Commenting on the results, Mr Dar said that the parties now in the government were aware of “the consequences” of moving the vote of no confidence but they went for it because not doing so would have disastrous consequences for Pakistan. “Allowing the previous government to continue would have been worse than the floods,” he said.
Calls for greater policy support from IMF, donors
Asked if President Biden’s remarks on Pakistan’s nuclear programme helped Imran Khan’s election campaign, the finance minister reiterated the prime minister’s assurance that the country had a robust command and control system and US officials often acknowledged it too. “But when a politician who has been a PM (Mr Khan) says the nuclear programme was good under me, but not now, this is how the world would react,” he added. “You should condemn him; he is doing petty politics.”
In his opening statement, the minister said during his four-day stay in Washington he had 58 meetings with the chiefs of international financial institutions and with US, Saudi and other officials. The World Bank and Britain, he said, also hosted a roundtable on floods, where UNDP, ADB and WB officials presented a joint report.
According to this report, the floods have caused a total loss of over $32.4 billion to the country. Pakistan needs more than $16 billion for immediate relief and rehabilitation works. The meeting, the minister said, made a strong appeal to the international community to help Pakistan.
Donors conference in France next month
The government had already spent over Rs99bn on relief and rehabilitation works, he said, adding that Pakistan and its allies were finalising a date for the donors’ conference that would be held in France next month.
He said Pakistan would complete its current IMF programme by June 2023 and would meet all its obligations.
Reminded of an IMF official’s statement urging Pakistan to continue its fiscal and energy reforms, Mr Dar said: “We are committed to the reforms, about 5pc to 10pc of the work is pending but will soon be completed.”
On energy, he said, “We are slower than their expected but will do it too.”
During PML-N rule in 2015, he said, Pakistan had exited grey list of FATF programme and would do so again. “We have banned factions, introduced laws, and solved issues. FATF’s Asia Pacific Group (APG) has done its reviews, APG, satisfactory, we have a National Action Plan, and we hope to move to the whitelist again after the next review.”
About IMF’s objection to subsidies, raised at a news briefing during his stay, the minister said the “donor do not mind targeted subsidies. It’s the general subsidy that they are against. Perhaps, the IMF officials were referring to the electricity subsidy that we gave.” He said that during the UNGA Pakistan discussed this issue with the IMF chief and asked for a decision on this. “She promised to do so, has not responded yet but we are not doing anything without consulting them.
Responding to another question he said he had not come to Washington to seek price reduction. “We take such decisions at home.”
Blaming the previous government for the current economic situation, Mr Dar said: “Pakistan’s economy is a man-made disaster. Their incompetency, their misgovernance caused it. We are here to save the economy, not to do politics. May God accept our sacrifice.”
Earlier while addressing a meeting of MENAP (Middle East, North Africa, Afghanistan, and Pakistan) Ministers of Finance and Central Bank Governors with IMF Managing Director Kristalina Georgieva in Washington DC, Mr Dar called for greater policy support from the IMF and multilateral donors in the backdrop of the climate-induced catastrophe and losses suffered by the country, adds APP.
He urged the IMF to tailor its response to the situation in Pakistan and similar countries by taking into consideration the serious economic, social and political challenges that those countries were facing in the backdrop of climate-induced calamities.
Given the scale of disaster, Mr Dar pleaded more policy support for Pakistan. He welcomed new IMF instruments Resilience and Sustainability Trust (RST) and Food Shock Window under Rapid Financing Instrument (RFI) to support countries.
The IMF managing director highlighted challenges faced by regional economies including from climate change events citing Pakistan’s damaging floods. She expressed her deep sympathies with Pakistan and assured the Fund’s full support.
On the sidelines of annual meetings of IMF-WB, Governor of State Bank of Pakistan Jameel Ahmed and the finance minister met Queen Maxima of the Netherlands to discuss financial inclusion and banking on equality. Mr Dar also met Director General of Kuwait Fund Marwan Abdullah Yusuf Thunayan Al-Ghanem and appreciated the contribution of Kuwait Fund to Pakistan’s economic development.
During his meeting with Asian Development Bank (ADB) President Masatsugu Asakawa, Mr Dar was assured of approval of BRACE programme amounting to $1.5bn and of continued support to Pakistan. He also discussed with International Finance Corporation (IFC) Managing Director Makhtar Diop potential means of enhancing IFC engagement in Pakistan.
In the IMF-World Banks 2022 annual meetings being held in Washington DC Mr Dar is leading Pakistan’s delegation comprising Minister for Economic Affairs Sardar Ayaz Sadiq, Minister of State for Finance and Revenue Dr Aisha Ghaus Pasha, SBP Governor Jameel Ahmed, Finance Secretary Hamed Yaqoob Sheikh, Economic Affairs Division Secretary Dr Kazim Niaz and Additional Finance Secretary Ali Tahir.
Published in Dawn, October 17th, 2022
